HP launches low-end PC for China

HP, the world's second largest producer of PCs, has begun selling a 3,999 yuan ($483) computer in China.

The announcement comes as major players in the PC industry start to produce low-end PCs targetted at people living in small towns and the countryside of China. Most of China's 1.3bn people live in these areas.

The model, part of HP's Pavilion series, features a FreeDos operating system and a CPU from Advanced Micro Devices Inc. (AMD). These products tend to be cheaper than the more popular Intel CPUs and Microsoft Windows operating systems.

Joseph Ho, a DBS Vickers analyst, told Reuters that he was unsurprised by HP's latest China move. "The market remains very difficult for Lenovo," he said. "Their backyard is on fire ... The China market remains very very competitive."

A similar lower power PC was released for the same price by Chinese company Lenovo Group Ltd earlier this year, which this week agreed to buy IBM's PC business for $1.25bn.

In August Dell dropped out of the low-end PC market in China, which is becoming increasingly competitive, as manufacturers turn to rural areas for continued growth. Many of the wealthiest residents of large cities in China already have PCs at home.

In the third quarter Lenovo held 24.6 per cent of China's unit PC sales. Founder Group came second, with 10.3 per cent, follwed by Tongfang with 8.7 per cent, Dell at 8.1 per cent, IBM with six per cent and HP at 5.3 per cent. ®